About 40 percent of Bolivia’s estimated population of 9.2 million people lives in extreme poverty, defined as less than $1 per day. The country is landlocked and mountainous. Distances between cities are long, and rural areas thinly populated. With its proximity to neighbors Argentina and Paraguay, eastern Bolivia has high potential for agricultural trade—but suffers from an underdeveloped road system. This has limited the ability of Bolivian farmers to get their products to promising markets. By the late 1990s, the poor condition of the 150 km Abapó-Camiri section of the main highway connecting eastern Bolivia with its southern neighbors was a major constraint on economic development.
To address this problem, the Bolivian Government requested World Bank support. The reconstruction and paving of the Abapó-Camiri Highway was more complex and larger in scale than previous Bank transport projects in Bolivia. It required bypasses of a major bridge and towns, and the highway transited several small indigenous communities. The project also aimed to finance a backlog of highway maintenance in the broader eastern region to improve traffic flows into the Abapó-Camiri section.
IDA’s investment in the Abapó-Camiri Highway Project more than doubled vehicle traffic along the road and decreased road-user costs by half, encouraging increased trade within the region, and with markets in neighboring Argentina and Paraguay.
The construction of the Abapó-Camiri Highway, including the bridge over the Rio Grande, the Camiri Bypass, and the access road to El Espino, benefited an estimated 1.3 million people who use the road. Its standards of highway design and construction are comparable to those in developed countries; it cost less than anticipated.
Highlights:
- At US$524,000 per km, actual costs were 15 percent lower than initial estimates. This compares favorably with highway sections constructed in Bolivia using rigid pavement, where final costs ranged from US$700,000 to US$800,000 per km.
- Traffic volumes, measured in vehicles per day, more than doubled along the route, from a baseline of 230 vehicles per day on the Abapó-Ipati section in 1999 to over 600 by the end of 2005; and from 370 to 650 per day on the Ipati-Camiri section.
- Average travel speeds more than doubled during the same period, from 33 to 80 km/hr for cars, from 30 to 75 km/hr for buses, and from 17 to 65 km/hr for heavy trucks.
- As a result, cost to users per vehicle per km dropped from US$0.55 before the project to US$0.22 after. For heavy trucks, costs dropped from US$1.59 in 1999 to US$0.62 resulting in increased competitiveness of Bolivian exports.
- All the highway sections provide robust economic benefits, with economic rates of return between 15 and 41 percent. The project’s net present value was US$66.6 million (at a 12 percent discount rate), 40 percent higher than the appraisal estimate.
IDA’s financial support was critical. The World Bank existing relationship with the National Road Service helped facilitate design and implementation. The Government tapped into the Bank’s extensive experience with similar projects and was open to advice about institutional and maintenance arrangements. Moreover, Bank involvement enhanced transparency in the bidding process and limited political interference, which helped control costs and uphold schedules.
The Bank brought with it vast experience in environmental safeguards, land acquisition, and resettlement—beyond standard Government practices. The project integrated the concerns of local indigenous communities, whose population totaled over 15,000 persons. In addition to the direct benefits of improved roads, these communities benefited from the Indigenous Peoples Alternative Development Plan, with its 28 subprojects in health, education, agricultural productivity, clean water supply, handicrafts, and micro-enterprise development.
Because of the Abapó-Camiri corridor’s importance in Bolivia’s agricultural development, the central and regional governments have continued to focus on it. The Strategic Plan for the Preservation of the National Road Network for 2002-2006 was used to develop road maintenance plans. Its successor, the Bolivia Road Rehabilitation and Maintenance Project, currently aims to revamp the institutional framework for road maintenance. Meanwhile, agricultural trade in eastern Bolivia is growing as a result of the improved roads.
